Dollar Gains Ammunition from Data, Focus Shifts to PCE
The US dollar continued its strengthening on Wednesday (February 18th) after better-than-expected US durable goods data came out, easing market concerns about slowing demand for high-value goods. The market now shifts its focus to the release of the FOMC meeting minutes, which could provide clues about how patient the Fed will be before opening the door to interest rate cuts.
Durable goods orders fell 1.4% in December after surging 5.4% in November, but this contraction was still milder than the -2.0% expected. This means the data is indeed weak, but not yet a significant drop—enough to keep sentiment toward the dollar solid.
Following the data, the dollar index (DXY) rose and briefly reached an intraday high. In the latest update, the DXY was around 97.43, up around +0.34%.
Next, the market focus turns to the Fed minutes (released at 19:00 GMT / 14:00 ET) for a reading on the central bank's required "bar" before further rate cuts. After that, PCE data and economic growth releases will also help shape interest rate expectations.
According to the market view, the combination of persistent inflation and a robust economy can keep yields high—and that typically provides additional fuel for the dollar.
Source: Newsmaker.id
